Task force recommends sustainable investment to UC Regents

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The UC Task Force on Sustainable Investing presented its recommendations Friday to the UC Board of Regents’ Committee on Investments, advocating that the university’s investment portfolio reflect environmental concerns while minimizing explicit discussion of divestment from fossil fuel companies.

The report, updated since the initial recommendation was announced Wednesday, recommends that the board integrate “Environmental, Social and Governance” factors in its portfolio decisions and invest $1 billion over a period of five years in renewable power and other environmentally friendly initiatives. It does not, however, recommend that the university divest from companies with high fossil fuel reserves.

Currently, $3 billion of the $91 billion managed by the university is invested in these companies, according to Dianne Klein, a UC spokesperson. Student groups such as Fossil Free UC have urged the university to divest on multiple occasions.

The task force was created in June to address concerns regarding the university’s investment in fossil fuels. It is composed of 11 members, including UC faculty and students. The student members were the only ones to vote against the task force’s recommendation, according to Klein.

The regents will vote on the recommendation at their upcoming meeting. If approved, the sustainable investment framework will be implemented by the end of the current fiscal year. Fossil Free UC plans to continue advocating divestment at the meeting.

The revised report removes the sentence, “The majority of the Task Force concluded that divestment in and of itself would not meaningfully impact climate change,” in addition to a statement that the benefit from divesting from fossil fuels would not outweigh the cost to the university’s portfolio.

The new iteration of the report recommends that the UC Office of the Chief Investment Officer “evaluate all strategies for achieving ESG goals as soon as practical, including whether to use divestment.”

Students spoke against the report’s failure to recommend divestment at the Friday meeting.

Berkeley City Councilmember Kriss Worthington said the city of Berkeley has officially endorsed Fossil Free UC’s efforts. He added that the city’s own divestment from fossil fuels had not “lost (it) one dollar or one cent.”

“I don’t think doors have been slammed, I think a lot of doors have been opened,” said Regent Paul Wachter, chair of the Committee on Investments, responding to criticism that the report closes the door to divestment at Friday’s meeting.

Jagdeep Singh Bachher, the university’s chief investment officer, pointed out that as of this week, the university has followed the report’s recommendation that investments be made according to the United Nations’ Principles for Responsible Investment — which offer possible actions for incorporating environmental concerns in investment decisions — making the university the largest to do so.

He, along with Regent Charlene Zettel, said the university must keep in mind its fiduciary responsibilities and invest carefully.

“Before we make any decisions to sell investments, we must be thoughtful and prudent as investors,” Bachher said at the meeting.

The UC Board of Regents will meet Wednesday and Thursday at the UCSF Mission Bay campus.

Sahil Chinoy covers higher education. Contact him at [email protected] and follow him on Twitter @sahilchinoy_dc.